Question # 1

Equilibrium price is a price at which

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Quantity demanded is equal to quantity suppled

Quantity demanded minus quantity supplied is zero

quantity demanded = quantity supplied

All of these

Increases in minimum wage

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Helps in controlling unemploymentr

Increases unemploymentr

Reduce wage bill

None of these

If the coefficient of price elasticity is less than one

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It is normal good

It is inferior good

It is luxury good

All of these

____________ represents the difference between what consumers have to pay for a product and what they are willing and able to pay.

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Producer surplus

Deadweight surplus

Government surplus

Consumer surplus

Direct investment and security purchase are classified as.

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Capital account transactions

Current account transactions

Unilateral transfer transactions

Merchandise trade transactions

Of the following which one is a characteristic of monopolistic competition.

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Standardized product

Comparatively easy only

Little non price competition

None of these

In order to maximize profits a monopoly company will produce that quantity at which the

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A marginal revenue equals average total cost

Price equals marginal revenue

Marginal revue equals marginal cost

Total revenue equals total cost

If a small country imposes a tariff on an imported good its terms of trade will

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Improve

Worsen

Not change

any of the above

Price controls are

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Necessary for consumer's welfares

A must to check inflation

Doomed to fall

None of these

That the division of labor is limited by the size of the market best applies to which explanation of trade.

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Factor endowment theory

Product life cycle theory

Economies of scale theory

Overlapping demand theory

Those who argue in favor of import protection generally give the impression that such restricted trade will

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Decrease the level of national security

Provide benefits to some particular industry

Provides benefits to the entire nation

Not yield welfare losses for the nation

If a country has linear production possibilities frontier than production is said to be subject to.

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constant opportunity costs

Decreasing opportunity costs

First increasing and the decreasing opportunity costs

Increasing opportunity costs.

Which of the following is a stock variable.

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Gross private domestic investment

Personal savings

Both a and b

None of these

A tax 15 percent per imported item would be an example of a

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Ad valorem tariff

specific tariff

Effective tariff

Compound tariff

Which of the following is automatic stabilizer.

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Unemployment benefits

Spending on education

Defense spending

Net interest

The effect of the most favored nation clause is to

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Eliminate at tariffs between countries.

Increase all tariff rates between countries

Maintain a nondiscriminatory structure of tariffs

Marlein a discriminatory structure of tariffs.

The earliest statement of the principle of comparative advantage is associated with.

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Adam Smith

David Ricardo

Eli Heckshcer

Berti Ohlin

Which industrialization policy have developing countries used which places emphasis on the comparative advantage principle as agued rto resource allocation.

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Export promotion

Import substitution

International commodity agreements

Multiateral contracts

The "balance trade" is a record of.

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Exports and imports of financial assets

The current account plus capital account

The export of goods and services.

the value of merchandise exports minus imports

The overall Budget Deficit is financed from

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External borrowing

Non bank borrowing domestically

Bank borrowing plus the above two at a and b

None of the above

Negative taxation refers to.

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Tax rebate

Subsidies

Tax evasion

Tax avoidance

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